The Economics of Non-selfish Behavior: Decisions to Contribute Money to Public Goods.

Author:Phillips, Ronnie J.
Position:Book review

The Economics of Non-selfish Behavior: Decisions to Contribute Money to Public Goods, by Stephan Meier. Cheltenham, UK and Northhampton, MA: Edward Elgar, 2006. ISBN-13:978 1 84542 441 1, ISBN-10:1 84542 441 7, $85.00. 168 pages.

News flash: self-interest does not always guide human behavior! Though this will not be a surprise to the readers of this journal, students taking economics courses today (both graduate and undergraduate) will he hard pressed to find any mention of an alternative view in their textbooks. Juxtaposed to the standard economics view of self-interested humans is the conception presented in the present book. The author recognizes that "it is necessary to enrich the narrow self-interest hypothesis with insights from other social sciences, especially social psychology." Those in the Veblen-Ayres-Dewey tradition of the original institutional economics will warmly receive this statement, as well as the author's conclusion that the recognition of a broader conception of human behavior has "implications for designing institutions that wish to foster pro-social behavior" (p. 3).

The author explores the issues of self-interest versus pro-social behavior through an examination of the willingness of individuals to donate to public goods. Empirical tests of non-selfish behavior are not easy to find or develop. You need either experimental economics or a controlled survey. The data used to test for pro-social behavior comes from a survey in which all students at the University of Zurich have to decide each semester whether they want to contribute to two social funds. One fund offers low-interest loans to students in financial difficulties and the other provides support for foreign students who wish to study at the University of Zurich.

Part One of the book is a survey of economic theories of pro-social behavior. The most prominent theories based on self-interest or "extended" self-interest imply that people will contribute to public goods only if there are selective incentives or incomplete information. For example, the contribution to a public good simultaneously allows the consumption of a private good. There could also be incomplete information about the number of repetitions of the transaction or about the rationality of the other individuals (p. 14). One could also say that individuals make contributions to a public good because they expect a large fringe benefit; for example, in giving to public television, you expect to watch...

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